What exactly about Lion is watered down exactly?
The UI has been refined.
Finder has been re-written.
Spotlight has been re-written.
New Mail (which I've yet to see a single complaint about it's design)
PPC code removed (in many ways this is a good thing, though the lack of Diablo II will be frankly, painful)
I have been using Lion for many weeks now. There are some really great new features. But I do feel the GUI is watered down. Apps like finder and Mail have been decolorized like iTunes. It is much harder to tell what parts of dialiog boxes and controls are active. The open/close/maximize/minimize buttons have been shrunk and deemphasized. A big deal? No, but I think they are a step back in usability and too me the appearance is very unexciting.